If your business has a SaaS model, you’ll know all too well that the customer journey between the initial point of subscription to finding the true value in your product can make or break your startup.
A lesser known and often overlooked metric known as TTV can help you measure and manage your customer experience to help them get to this point and remain a paying customer.
So, what is TTV? What does TTV stand for? What does TTV mean? Why is TTV important?
In this blog, we take an in-depth look at the TTV metric to answer all of these questions and explore how it can be a valuable addition to your KPIs.
What does TTV stand for?
TTV stands for “time to value”. It’s a metric that examines the distance from sign-up, through the onboarding phase, to the point where a user finds the “Aha! moment” with your product.
“Time to value” means almost exactly what it sounds like: It is the amount of time it takes for a customer to realize value from your product.
Naturally, customers who never realize they can truly benefit from your product are unlikely to stick around. This is why a shorter TTV is ideal. When new customers can quickly see how your product will provide a return on their investment, they are much more likely to become loyal long term users. A longer TTV on the other hand could indicate a number of issues, such as an unnecessarily high level of customer churn, an inefficient onboarding process, or even a poorly designed user experience.
Depending on the complexity of your product, the type of users, and the problems they are seeking to solve, your TTV could naturally be very low.
In the case of highly technical enterprise products for example, the TTV could span many weeks (or even months) as users learn, integrate, and come to value your software.
Why time to value is important in SaaS
TTV revolves around the quality of customer experience during the initial stages of their journey with your product. The lower the TTV metric becomes, the better your SaaS product will perform as a result. It means new subscribers are building habits and finding value with your product in a shorter amount of time.
As the potential for churn essentially begins the moment a customer subscribes, it’s important for SaaS companies to look at ways of reducing their TTV to encourage long term retention.
In the online landscape where competition is steadily growing, the potential for customers to product switch is high. If your onboarding is too complex, support isn’t robust enough, or your offering simply doesn’t deliver on its promises (leaving customers in the “trough of disillusionment“), it’s just a matter of time before your shiny new users log out — never to return.
Reducing time to value for your SaaS product
Looking at your TTV means going in-depth on your product and processes over time in order to reduce this number. The key to reduction for your specific SaaS product may lie in refining your onboarding processes, or determining that what you thought was the critical point where your customers find value is different.
There’s no single solution. For your company, improving TTV might look like ramping up customer service and support for early-stage users , or improving the customer experience of your onboarding flow to make it easier to get people to experience their critical Aha! moment.
Why don’t more SaaS startups use the TTV metric?
Despite its potential to positively impact retention for companies, and in turn increase revenue, TTV remains somewhat of an elusive metric that hasn’t been widely adopted by SaaS teams.
It’s a metric that is tough to calculate and standardize. Other core metrics can come to similar conclusions and help drive retention, while being less taxing on the time, resources, and brain power of your team.
Nonetheless, TTV is a worthy addition to your metrics stack. With a continued focus on what “value” means for your customers, you can look at how to deliver it more seamlessly. People want software that works, and a product that’s as fast as possible to get to grips with. Companies ultimately need to deliver this.
Reducing TTV to the shortest span possible for your company can have a positive effect on all corners of your operations. Engineers can find ways for people to find value in the product faster. Sales and customer support will have a deeper understanding of how to communicate value. Increased retention can take the pressure off your marketing and acquisition budget.
TTV is an ally that can support all of the other guiding KPIs that companies spend most of their time on. ARR, CAC, LTV and other metrics can all benefit from a solid understanding of the “why” and “how” people are sticking with your product.
The core of the TTV metric is “value”
The core of the time to value metric is “value”. Beneath the surface of the actual metric, learning as much as you can about the TTV for your SaaS product is critical. It helps you understand the lifecycle of your users at an early stage so you can seek to extend it. It also ensures you can provide people with the exact value that they were promised when they first discovered your product. The result? Increased retention, and more importantly – happy customers and brand advocates for your company.